Tesla
Consumer Products

What’s driving a kids ride-on car sales boom?

Mini Teslas, BMWs and Porsches are more mainstream than you'd think, with US ride-on car sales up 23% in the last two years. According to those behind the wheel, play patterns, innovation and big licenses are giving the market a boost.
December 22, 2016

Lately, there has been an undeniable surge in toy sales that echo the nostalgia of the ’80s and ’90s. Hasbro, for one, has benefited from a rise in demand for Nerf toy guns and Trolls dolls, with the latter contributing to a 14% rise in the company’s Q3 2016 revenue.

But few nostalgia-based toys have had the longevity and consistency of ride-on battery-operated cars, which were originally released in 1984. In fact, the decades-old category is showing no signs of slowing down, with more automotive licensees joining the fray each year amid rising sales.

Between December 2014 and November 2015, sales of ride-on cars and accessories rose 13% from US$360.2 million to US$408 million, according to The NPD Group. More growth occurred between December 2015 and November 2016, with sales rising another 10% to US$449 million. Not surprisingly, these cars are even more popular during Q4, with 56% of sales occurring during the coveted holiday season. So what’s driving the growth?

One factor is an increase in variety, as brands vie to release the year’s next best thing.

“There’s the innovation aspect, and I think this year it’s the Wild Thing from Fisher-Price. It’s a cool vehicle that has a new way of driving, using a joystick instead of a pedal to go forward and backward,” says Jamie Uitdenhowen, VP and general merchandising manager of learning and seasonal at Toys “R” Us. “So far this year, the Wild Thing is our most popular vehicle that we have.”

As the ride-on battery-powered car market increases, more companies are getting into the game, such as Radio-Flyer. Though it has been making products with wheels for more than 100 years, it recently made its foray into the market due to a new partnership with Tesla (pictured).

“We were doing a lot of research on battery-operated cars and one of the main complaints that parents had was that the battery would die and have to be charged overnight. That’s because it’s a typical acid battery,” says Robert Pasin, CEO of Radio-Flyer. “We felt like we could fix that by doing a lithium-ion battery, and then as we researched it more and really admired what Tesla was doing and how it was disrupting the whole adult car market.”

Retailing for more than US$500, the mini-Teslas are one of the more expensive cars on the scene. But that hasn’t stopped them from being popular. Pasin declined to say how many Radio-Flyer Teslas have sold to date, but he did say he was very pleased with the figures. In fact, there may be more Teslas in the company’s future.

Another factor boosting battery-operated car sales is modernization. In the same way adult cars are constantly being upgraded, the same can be said for kids models, thanks to options like a Porsche 911 or a BMW I8.

“We stock Audis. Last year, our big holiday car was our Porsche. That was our ultimate holiday car that did very well…there are also some fun high-end cars that the kids love,” says Uitdenhowen.  “I don’t know if kids are really into BMWs or they just like the fact that there are butterfly doors that go straight up.”

Toy companies continue to license new cars from the automotive industry, which is resulting in a larger variety of options. Toys “R” Us, for example, has more than 50 varieties in-store, and even more online.

The appeal of these toys has a lot to do with a distinct play pattern, as they offer kids the chance to play just like mom and dad. They may also fulfill some dreams of parents, who are happy to buy mini versions of cars that they could never afford.

“We knew that kids like to pretend they’re like their parents. So when they see mom and dad driving an F-150 or a Jeep, it makes the experience more enjoyable and realistic to be able to have something that is very similar,” says Adam Kinsella, marketing manager for Power Wheels, which makes ride-on cars for Mattel. “Having that realism has helped us drive sales over the years.”

Automotive companies also have an incentive to make children’s cars, since deals with toy companies often come with an upfront licensing fee and a share of the profits, according to Kinsella. Besides the money, there is the potential for a child to eventually buy the real deal when he or she grows up.

“I think that it helps get people in the brand early. If kids remember their first experience driving the F150, it might make them more likely to buy one when they’re older, which is another reason I think the auto manufacturers see an appeal to work with us,” says Kinsella.

Even if car companies can’t wait that long, having a smaller version on display at their stores, like Tesla does, is an innovative way of getting parents in the door.

“Kids bring the parents in and then suddenly the parents are sitting in a full-sized Tesla checking it out,” says Pasin.

And speaking of longevity, there is the matter of repairs. Unlike other toys that might get banged up or break, these ones actually have a place to go for fixes.

“We have more than 350 service centers across the US and Canada, where consumers can take it in and get it fixed,” says Kinsella. “So we really support our product and I think that’s one of the reasons we’ve been so successful over the years.” .

About The Author
Alexandra Whyte is Kidscreen's Online Writer. Contact her at awhyte@brunico.com

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